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Planners' Pain Points in Hotel Negotiations

Where negotiations often run afoul, and how to cope

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by Michael J. Shapiro and Sarah J.F. Braley |
May 01, 2016

Dietary Concerns

Upcharges for special requests concerning F&B have been cropping up, such as fees for more than a certain number of plates to satisfy dietary restrictions. One hotel charges a $75 fee per meal to label each dish, subject to a 5 percent event fee, a 23 percent service fee and sales tax. Beth Cooper-Zobott, director of conference services for Chicago's Equity Residential, did some calculations: For a three-day meeting including daily breakfast, lunch and one break (or nine meals total), the cost to include labels on buffet items would be at least $75 plus $21 (28 percent in taxes) times nine meals, for a grand total of $864 in label fees.

Tracy Stuckrath of Thrive! Events in Atlanta, an expert on providing special foods for those with dietary restrictions, says properties that place fees on labeling should be challenged on the basis of the Americans with Disabilities Act. "For attendees with food allergies, celiac disease or any other medical condition that requires a special diet, kitchens must provide them a reasonable accommodation as long as it does not cause the hotel an undue burden," she says.

"Providing labels is not an undue burden," Stuckrath adds. "In Europe, signs stating the food name and any allergens present are required by law for unpackaged food served directly to consumers." At a minimum, common allergens like tree nuts, peanuts, milk, eggs, wheat, soy, fish and shellfish should be noted.

-- Sarah J.F. Braley

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"It is all about availability these days," says Amanda Armstrong, CMP, director of corporate travel and meetings for Enterprise Holdings in San Diego, parent company of Enterprise, National and Alamo car-rental brands. "The suppressed demand from the recession has surfaced full force, and hotels are generally booked. It takes away negotiating power -- there are always other meetings that will compete for the space."

Indeed, hoteliers are riding a wave of record demand, forecast by analysts to last at least through 2017, and as a result, meeting professionals are faced with formidable challenges at the negotiating table. M&C asked planners to share their biggest points of contention in these negotiations, and how they're ultimately working together with properties to ease the pain.

Associations on the ropes
In these flush times, hoteliers can afford to be picky about business, leaving association planners at a particular disadvantage. "When you're in the association world, you're used to your business being treated as 'base' business," notes Martin Balogh, associate executive director of the meetings and travel group at the Chicago-based American Bar Association. Associations typically pay less for room rate and food and beverage, while using a disproportionate amount of venue space.

"What happens in a strong market is that many hotels take less base business. What had been our strength all of a sudden becomes less so; hotels that might normally put in a 30 percent base of association business are feeling confident and may drop that to 20 percent. So there are fewer opportunities for us to place our business in this market. They're saying no to me and waiting for a better piece of corporate business."

For Balogh and his peers, that means having to be far more flexible than usual -- not just with dates, but with meeting space and related logistics.

"We might not get the amount of breakout space we need because hotels want to have extra space available for short-term corporate business," says Balogh. "We now spend an awful lot of time working with our clients to adjust not just the dates but the number of breakout rooms, room setups and so forth. If in the past, hotels spent most of their time negotiating rates for sleeping rooms, they are now spending as much time on how to get the highest return on their meeting space."

A sea of fees
Based on responses from many planners, today's negotiation pain points most commonly take the form of new and rather innovative fees. For instance, a large meetings hotel in downtown San Francisco now has a sliding scale of charges if groups don't send in program details at least 30 days in advance.

When she first noticed this, Beth Cooper-Zobott had to laugh. "It was funny to me," says the director of conference services for Chicago's Equity Residential. "The salesperson in her emails and descriptions never mentioned any of these fees, but she sent me a link to their website. Underneath 'meetings' was the mother lode. I have never seen anything like this."

At the hotel, if program details come in 21 days in advance of the first scheduled event, a $250 fee would be applied; 14 days in advance of the first scheduled event runs $500. A similar scale is laid out for delinquent signed banquet event orders: 11 days in advance of the first scheduled event, $250; nine days in advance, $500; seven days in advance, $750.

"My husband and I actually have stayed at that hotel -- that's what made me think of the property when I was considering booking my group in San Francisco," says Cooper-Zobott. "It was very off-putting for me, very nickel and dimey. They weren't even embarrassed. We didn't end up booking there, and the fees were part of the reason. We wound up at another property nearby."

Other fee gripes include the need to pay for basic electricity to plug in a phone or laptop, extra room-rental fees just to store an unwanted table from a suite, and advertising-space fees to rig signage -- on top of the rigging fees. And there are the increasingly common resort fees, "often levied by properties one didn't previously consider to be a resort," says Martin Balogh of the ABA.

But however indignant planners might be when hit with such unexpected charges, the fact that the fees are mounting shouldn't be surprising. Hotel fees and surcharges were forecast to add up to a record $2.47 billion last year, according to Bjorn Hanson, clinical professor at the Tisch Center for Hospitality and Tourism at New York University, in his annual trend report. That total has steadily increased since fees were first introduced in 1997.

The fees levied specifically on meetings, notes Hanson, have become so common that fewer planners have the luxury of walking away from hotels that charge them. Now, planners need to carefully evaluate and compare what various fees will mean to their bottom line, says Hanson: "Hotel A will have charges a, b and c, and Hotel B will have charges d, e and f. One hotel might charge a little bit more for something and a little bit less for something else."

Surprise deposits
Another planner concern regards deposit requirements, which often are not discussed until the point of contract. "It's been coming up quite often lately," says Denver-based Deborah Borak, CMM, vice president of global accounts and team director for Conference-Direct. "Some are requiring the meeting to be fully paid before arrival, or at least 75 percent of it. There is no mention of a deposit in the RFP response, but when we go to contract, it is listed in there, and the hotels don't want to budge. Oftentimes the deposit is due when the contract is signed -- and it can be a large amount."

For some clients, adds Borak, this is a major concern. "This is particularly difficult for an association that needs to get registration funds in to pay for the meeting, which might be a year or two away," she says.

Less severe but likewise irksome, says Borak, is the request by hotels for a small deposit of $250 or $500 with the contract, "to show good faith." She says that "sometimes it can require the organization to do a purchase order or a check request, and it's a nuisance since it is such a small amount."

How to Dodge Extra Fees

In a conversation about new fees on M&C's Meetings Industry Forum, Veronica Scrimshaw, director of corporate communications for NPAworldwide in Grand Rapids, Mich., noted she is seeing upcharges for "more than #X special dietary requests" from multiple hotels.

"I have not responded to the upcharges for special meals," she says. "So far, we have always been within the 'free' window. For example, at our Global Conference in Washington, D.C., this year, I had 16 special meal requests out of about 160 guests. We were able to handle them based on menu selections without having to order special individual meals."

If you are faced with a fee for special meals, and said meals were provided due to medical reasons, Tracy Stuckrath of Thrive! Events in Atlanta suggests quoting from the Americans With Disabilities Act to possibly get such charges waived.
Beth Cooper-Zobott, director of conferences for Chicago's Equity Residential, believes such fees are particularly difficult for inexperienced planners who don't know what to expect. "It really hurts people for whom it's their first rodeo," she says. For her part, the process of selecting hotels includes a spreadsheet with room rates, other charges and any additional fees, for a total cost beyond just room rates for an accurate comparison.

If you see any strange fees cropping up in the sourcing process, redline it out, if you can. And walk away if you can't make a dent in the issue. "Everything is negotiable, but pick your issues carefully," says Jonathan T. Howe Esq., founding partner and president of hospitality law firm Howe & Hutton. "If it's a crazy fee, absolutely negotiate."

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This is sponsored content, either sponsor
supplied or produced by Northstar Meetings Group custom content team, on topics
of interest to the meeting planner community. To learn more about custom
content solutions, click here.